How to check contractor payment performance

A new subcontract can fit your team and programme but still require more working capital than you expect. Checking contractor payment performance before you commit gives you something concrete to discuss alongside the proposed payment terms, application dates and retention conditions.

The UK government provides a free service for checking published payment reports from in-scope large businesses. This guide explains where to look, which figures to read together and how to turn the information into a practical pre-contract conversation.

All worked examples below are wholly fictional teaching examples. They do not describe, anonymise or reproduce any real company's report. This is general commercial information, not legal advice or a recommendation to trade with or avoid any particular business.

Where to check contractor payment performance

Check contractor payment performance through the government's published payment-report service, using the legal entity that would sign your subcontract. Read the latest reporting period and the accompanying terms, not just the headline average. The report is historical information supplied by the business, so use it alongside your proposed contract and other checks.

Find the correct legal entity

Start with the draft subcontract or order. Record the legal name and company number of the organisation responsible for paying you. A trading name or familiar group brand is not enough to establish that you are looking at the right payer.

The government's duty-to-report guidance says reporting is prepared for individual companies or limited liability partnerships, rather than satisfied by a group report. Check that the report's company number matches the proposed contracting entity.

Find the report and check its dates

Use GOV.UK's supplier-payment report search. In-scope large businesses publish payment reports at least twice a year. The detailed guidance explains the size tests and reporting exceptions; not every contractor is required to appear.

Record the reporting period, submission date and source link. A recently filed report still describes an earlier period. If you compare reports, check whether the periods and business scope are comparable before drawing conclusions.

If no report appears, check the entity details and reporting scope. Absence alone is not evidence of financial difficulty or a reporting breach. Ask for clarification rather than filling the gap with assumptions.

How to read contractor payment performance figures

Read contractor payment performance as several separate measures: average payment days, payments outside agreed terms, payment timing by number and value, and the stated contractual terms. They describe different populations and cannot be substituted for one another. A favourable average does not establish that every supplier was paid promptly or predict your project's payment date.

Average payment days versus agreed terms

Average payment days describes the mean time taken for payments included in the measure. Agreed payment terms describes the contractual timing. Under the official methodology, payments not yet made are excluded from the average and included when paid in a later period. That is one reason to read the late-payment measure too.

In fictional Example A, the reported average is 32 days, the most frequently used contractual period is 45 days, and 8% of payments due were outside agreed terms. These independently invented figures are not market statistics.

You cannot conclude that your application will be paid in 32 days or that its contractual deadline changes to 32 days. Ask which terms and payment process apply to your specific package.

Payment timing by number versus value

The official guidance applies value-based payment-timing reporting to financial years beginning on or after 1 January 2025. Older reports may not include that measure.

Fictional Example B shows these made-up payment-timing figures:

• By number: 72% within 30 days, 22% in 31 to 60 days and 6% in 61 days or longer.
• By value: 49% within 30 days, 42% in 31 to 60 days and 9% in 61 days or longer.

Each set totals 100%, but each answers a different question. The first counts payments; the second measures their value. A higher proportion of payment count within 30 days does not mean the same proportion of pounds arrived within 30 days.

The percentage outside agreed terms is different again: its reference is the agreed deadline for payments due in the period. Payment after 30 days is not automatically late under every contract. A payment made sooner than that can still miss a shorter deadline.

Construction applications and the reporting clock

For construction contracts covered by the relevant legislation, the reporting guidance uses the earliest point at which the business has notice of an amount for payment. This is generally receipt of an application for payment. Without an application, it is receipt of a payment notice or default payment notice, or issuance of a payment notice, whichever is earliest. Day one is the following day.

This methodology is not a substitute for identifying the due date and final date for payment under your subcontract. Keep those dates separate. Ask for the proposed application timetable and payment mechanism, and obtain advice if their meaning is unclear.

What retention information should you check?

Check whether retention is used, the stated standard rate, the circumstances in which it applies and the process for release. Then compare those statements with the actual subcontract offered to you. A published policy provides background; it does not itself establish your retention percentage, release dates or entitlement on a particular project.

The 2025 retention-reporting amendment added information about retention practices for qualifying construction contracts. Its reporting amendments apply to financial years beginning on or after 1 April 2025. These are existing reporting rules, not a new October 2026 payment deadline.

Read both the numbers and the narrative:

• Is there a standard retention rate, or does the approach vary?
• Does the report describe release in stages?
• What events or conditions trigger each release?
• Is there a stated approach to aligning supplier retention terms with client terms?

The published standard retention rate and the aggregate retention amounts are different measures. In particular, retention withheld as a proportion of payments is not necessarily the percentage rate in your proposed clause.

Ask for the clause itself, the proposed rate and the evidence needed to request release. Our retention guide explains the wider concept; the contract still needs its own review.

What a payment report cannot tell you

A payment report cannot confirm current solvency, guarantee future payment or decide whether a particular deduction is lawful. It summarises reported practices and historical qualifying payments across a business. Treat it as a starting point for questions, alongside the proposed contract, current information and appropriate professional advice, rather than as a credit rating.

The figures may include different suppliers and contract types from yours, and do not explain every individual delay or dispute.

Reports also have a time lag. A change after the reporting period will not necessarily be reflected. A comparison between two periods may be affected by the mix of payments made, not simply a change in policy.

Where information is missing or inconsistent, record the question and seek an explanation. Do not treat a blank field, unmatched name or absent report as proof of misconduct. If you need a credit or solvency assessment, use suitable current information and professional advice for that separate purpose.

Questions to ask before accepting a subcontract

Before accepting a subcontract, ask which entity pays you, how applications are submitted, how the due date and final payment date are determined, and what retention conditions apply. Record the answers against the proposed documents. Use published performance to inform the conversation, without treating an average as a contractual promise or a forecast.

Ask the commercial team:

1. Who is the contracting entity, and who handles application queries?
2. Which application dates, submission method and supporting documents apply?
3. How are the due date and final date for payment determined?
4. How are valuation queries, variations and deductions communicated?
5. What retention rate, release conditions and request process are proposed?
6. Are there project-specific terms that differ from the published standard terms?

Ask for the relevant provisions in writing. If a reply conflicts with the draft subcontract, resolve the discrepancy before relying on it. This checklist is not a substitute for checking contractual enforceability with an adviser.

A fictional cash-flow illustration

This illustration is independently invented and does not reflect any actual contractor or customer. Assume a £120,000 subcontract package and a £24,000 gross application. For simplicity, exclude VAT, CIS, deposits, other deductions and adjustments, and assume 5% retention on this application's gross value.

• Retention: £24,000 × 5% = £1,200.
• Remaining application amount: £24,000 minus £1,200 = £22,800.
• Labour, materials and plant payments due before the expected receipt: £19,000.

The £22,800 is an assumed receipt for planning, not proof that the payer owes or will approve that amount. If it arrives when assumed, it covers the £19,000 outflow with £3,800 remaining, before any other business costs.

Now move that assumed receipt 30 days later. If the £19,000 still falls due first, available funds or finance must cover it in the meantime. The additional requirement depends on opening cash, other receipts and other outgoings; it is not automatically a £19,000 borrowing need.

This is a deliberately chosen delay scenario. It is not derived from a public report's average or offered as a prediction. Use cash-flow forecasting guidance to separate the expected case from alternatives, and the retention calculator to check a simple retained-amount illustration.

A reusable pre-contract payment checklist

A useful pre-contract checklist records the payer, report period, relevant measures, proposed payment mechanism, retention terms and unanswered questions. Save the source and date alongside your notes. Its purpose is to support a documented commercial decision, not produce an automatic accept-or-reject score or certify that a business will pay on time.

Use these fields for each proposed job:

• Legal entity and company number.
• Published report link and date checked, or the reason no matching report was found.
• Period covered and any comparison-period differences.
• Average days, outside-terms measure, and timing by number and value where available.
• Proposed application dates, due date mechanism and final date mechanism.
• Retention rate, release conditions and supporting documents required.
• Proposed contract provisions that need clarification or professional review.
• Expected receipt assumptions and the effect of a later receipt on your cash plan.
• Person responsible for resolving each outstanding question.

Keep the public report and your contract notes separate. Once work begins, the live-project financial-distress checks address a different task: reviewing your actual exposure. If payment becomes overdue, see the late-payment guide and seek advice appropriate to the circumstances.

Keep the agreed payment workflow in BuildQS

After you have reviewed and agreed the subcontract terms, BuildQS can support the payment-application workflow. It tracks applications through Draft, Submitted, Approved and Paid and calculates application values from entered project data. That is a record-management role, not a contractor credit check, legal assessment or assurance that money will arrive.

The payment-application features calculate this-period and cumulative application values, retention and net due from the entered project and completion data. Input quality still matters; the calculation does not establish contractual entitlement.

Retention management supports configured 6+6, 12-month and custom release schedules. Select the arrangement relevant to your contract rather than assuming every subcontract follows the same pattern.

On eligible plans, cash-flow forecasting uses supported project data to forecast expected inflows and lets users save what-if scenarios. Those dates and outcomes remain assumptions. BuildQS does not assess a payer's solvency or guarantee collection.

Frequently asked questions

Published payment figures describe a past reporting period, not a guaranteed date for your application. Check the contracting entity and your own terms, distinguish payment timing from lateness, and read retention conditions separately. If no matching report exists, investigate reporting scope and entity details before drawing conclusions about either compliance or financial condition.

Is average payment time my contractual payment deadline?

No. The average describes payments included in the reported measure. Your contractual due date and final date for payment need to be identified from the subcontract and any applicable legal requirements. An average cannot replace that review or predict when an individual application will be paid.

Does a low late-payment percentage mean a contractor is financially safe?

No. Payment-practice data is not a solvency assessment or a guarantee. Check the reporting period, the scope of the figures and current information relevant to the proposed relationship. A credit assessment and a contract review answer separate questions and may require specialist advice.

What if I cannot find a contractor's report?

Check the legal name and company number, then whether the business is within reporting scope and when reports are expected. Some businesses are not required to report. Absence alone does not establish financial difficulty or non-compliance; ask for clarification if it matters to your decision.

Can I rely on the published retention policy instead of the subcontract?

No. The published policy helps you ask questions, but your project's rate and release conditions need to be established from the relevant contract and circumstances. Ask for unclear or conflicting terms to be explained, and obtain professional advice on their legal effect where necessary.

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Sources

• These official sources explain the reporting service, its methodology and the retention-reporting amendment. They support the factual reporting statements above, not the invented example figures or any assessment of a contractor. Source links were checked on 2 October 2026; consult the current guidance when applying it to a particular business or contract.

• GOV.UK, Check when large businesses pay their suppliers, accessed 2 October 2026. No publication year is stated on this service page.
• Department for Business and Trade (2025), Duty to report: guidance to reporting on payment practices and performance, updated 2 September 2025.
• UK Government (2025), The Reporting on Payment Practices and Performance (Amendment) Regulations 2025, SI 2025/75, particularly regulation 1 and Schedule 2.

This article provides general educational information for UK construction businesses. It is not legal advice, a credit assessment or a recommendation about any business. All worked examples are fictional and are not based on any identifiable company. For advice on a particular subcontract, payment dispute or reporting obligation, consult an appropriately qualified adviser.